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Lessons From 2013: Part I

Date17 Jan 2014

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Every year the markets provide us with lessons on the prudent investment strategy. Many times markets provide remedial courses covering lessons it had provided in prior years. That's why one of my favorite statements is that there's nothing new in investing, only the investment history you don't know.

Lessons From 2013: Part II

Date17 Jan 2014

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What should I do about the inevitable rampant inflation problem we are going to face because of the huge fiscal and monetary stimulus that's been injected into the economy? This has been one of the most persistently asked questions I've received since 2009.

Poking Holes in the Inflation Conspiracy Theory

Date15 Jan 2014

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The academic research makes clear that the best hedge against unexpected inflation is Treasury Inflation Protection Securities (TIPS). Despite the evidence, many investors won’t invest in TIPS because they believe that the U.S. government is (or will) cheat by underreporting inflation. Read the rest of this article on CBS News.

How to React to Diminishing Returns

Date14 Jan 2014

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The first piece of pumpkin pie is a real treat. The second piece might be good. But we may almost have to force ourselves to eat the third. Instead of enjoying it, we’re miserable. Why doesn’t the last piece taste as good as the first

The Five Deadly Sins of Investing

Date14 Jan 2014

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If you invested dispassionately, using an objective analysis of the historical data, you would invest in a globally diversified portfolio of index funds with low management fees. It’s not that you can’t beat the market by investing in actively managed funds. Every year, some mutual funds outperform their benchmark. However, their probability of doing so over the...

Why We Buy in a Marked-Up Market

Date13 Jan 2014

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When dividends are included, 2013 was the fifth consecutive year of positive performance in the stock market (as measured by the annualized Standard & Poor’s 500 return). The stock market is now up more than 200 percent from the bottom of the financial crisis in March 2009. Returns since those dark days have been unbelievable,...

Bond Funds Aren’t Naturally Riskier Than Individual Bonds

Date13 Jan 2014

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In spending significant time talking to clients and wealth advisors about fixed income, one common misconception is that bond funds are more exposed to interest rate risk than laddered individual bond portfolios. The logic basically starts and ends with the observation that individual bonds can be held to maturity while bond funds don’t necessarily hold...

Take the Plunge, or Drip by Drip?

Date10 Jan 2014

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One of the questions I am most asked goes something like this: “I have a large amount of cash to invest. Should I invest it all at once or spread the investment out over time?” Perhaps the cash comes from the sale of a business or an inheritance. Or the cash might build up over...

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